LPG Distributorship : Registered Lease Deed for a Period of 15 years is a Necessary Requisite [Case Law]

LPG Distributorship - Selection of L.P.G. Distributors - Guidelines - the condition contained under the guidelines to have a registered lease deed for a period of 15 years is a necessary requisite in order to satisfy the requirements.

 Petitioner has made necessary details in the application with respect to the lease deed, but it was not in terms of the guidelines provided for the selection, evident from Ext.P6, when field verification was conducted. Moreover, in my considered opinion, it can never be termed as a directory condition since the showroom is a necessary concomitant for the conduct of LPG distributorship. Therefore, no rectification is possible after the selection is over. So also, since the requirement was made as a condition precedent, and if all other applicants have complied with the same, then the petitioner who has not complied with such a condition, can turn around and contend that, it is only a directory requirement, which can be rectified by the petitioner after the selection is over, which contention, if accepted, will be arbitrary and illegal. It is also explicit and clear that Ext.P5 order is passed in accordance with the stipulations in Ext.P1 advertisement and Ext.P6 guidelines. Taking into account all the aforesaid aspects and reckoning the legal situations discussed above, I am of the considered opinion that, petitioner has not made out any case of arbitrariness, illegality and unfairness justifying interference of this court under Article 226 of the Constitution of India. Therefore, writ petition fails, accordingly it is dismissed.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

SHAJI P. CHALY, J.

W.P.(C) No.11565 of 2018

Dated this the 12th day of April, 2018

PETITIONER(S)/PETITIONER

KARTHIKA K.

BY ADVS.SRI.S.SREEKUMAR (SR.) SRI.JAWAHAR JOSE SMT.CISSY MATHEWS SRI.SARUN RAJAN 

RESPONDENT(S)/RESPONDENTS

1. THE UNION OF INDIA REPRESENTED BY THE SECRETARY, MINISTRY OF PETROLEUM AND NATURAL GASES, NEW DELHI, PIN -110 001.

2. THE HINDUSTAN PETROLEUM CORPORATION LIMITED JAMSHEDJI TATA ROAD, MUMBAI, PIN -400020, REPRESENTED BY ITS MANAGING DIRECTOR.

3. THE CHIEF REGIONAL MANAGER HINDUSTAN PETORLEUM CORPORATION LIMITED, 2ND FLOOR, DEO GRATIAS BUILDING CHILIMBI URVA STORES, MANGALORE, PIN -575 006.

4. THE GENERAL MANAGER SOUTH ZONE, HINDUSTAN PETROLEUM CORPORATION LIMITED, 4TH FLOOR, THALAMUTHU - NATARAJAN BUILDINGS, GANDHI -IRWIN ROAD, EGMORE, CHENNAI, PIN -600008.

R1 BY SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL R2 TO R4 BY SRI.M.GOPIKRISHNAN NAMBIAR, SC

J U D G M E N T

This writ petition is filed by the petitioner seeking to quash Ext.P5 order passed by the 3rd respondent dated 7.3.2018, whereby the candidature of the petitioner is rejected in respect of LPG distributorship and an amount of Rs.50,000/- deposited with the Corporation was forfeited in tune with clause No.5 of Ext.P1 Advertisement. The question emerges for consideration in this writ petition is whether non-compliance of a term in Ext.P6 unified guidelines to have a registered lease deed in respect of showroom is a mandatory requirement or an auxiliary one.

2. Material facts for the disposal of the writ petition are as follows; 2nd respondent along with other Government enterprise petroleum companies have jointly issued an advertisement in Malayala Manorama newspaper on 3.9.2017 inviting applications from eligible persons, for appointment as LPG distributors at different places/locations in the State of Kerala, evident from Ext.P1. Petitioner has applied in two locations specified in Ext.P1 i.e., Kanhangad and Cheemeni both in Kasaragod District. The location at Kanhangad was advertised on behalf of the 2nd respondent Corporation and the location at Cheemeni was advertised on behalf of the Bharat Petroleum Corporation Limited, evident from Ext.P2. According to the petitioner, petitioner is having all the eligibility criteria for being selected as a LPG distributor. Apart from the petitioner, eight other persons had applied in respect of the location at Kanhangad. Petitioner was selected by conducting draw of lots from among the nine eligible applicants on 6.12.2017 by the District Collector, Kannur. The selection of the petitioner was intimated as per Ext.P3 dated 7.12.2017.

3. Accordingly petitioner was directed to deposit an amount of Rs.50,000/- and also directed to submit the required documents, which are specified in Ext.P3 document. Petitioner submitted the documents and accordingly the field verification was conducted by the Officers of the 2nd respondent on 27.1.2018. However, after the field verification, the selection of the petitioner for Kanhangad is rejected for the reason that, the land offered by the petitioner for showroom is found not meeting the eligibility conditions as per the criterion of selection, and laid down guidelines, for having a registered lease deed only for a period of 5 years against the stipulation for a period of 15 years. It is thus challenging Ext.P5 and seeking other consequential reliefs this writ petition is filed. It is also the case of the petitioner that, petitioner had a registered lease deed of showroom on 21.1.2018 for 5 years evident from Ext.P7 and an unregistered lease deed for a period of 15 years from 24.1.2018. Therefore, according to the petitioner, petitioner has satisfied the requirements contained under Ext.P1 advertisement and Ext.P6 guidelines for selection.

4. I have heard learned Senior Counsel for petitioner, learned ASGI, learned counsel appearing for respondents 2 to 4 and perused the pleadings and documents on record.

5. The subject issue revolves around sub-clause (w) of clause 1 read along with clause 8(n) of Ext.P6 guidelines, which read thus: 

1(w):“Ownership' or “Own” for godown/showroom for Sheheri Vitrak, Rurban Vitrak, Gramin Vitrak and Durgam Kshetriya Vitrak Type of Distributorship means having: 

a) Ownership title of the property Or 

b) Registered lease deed having minimum 15 yrs of valid lease period commencing on any day from the date of advertisement up to the last date of submission of application as specified either in the advertisement or corrigendum (if any).

Additionally, applicants having registered lease deed commencing on any date prior to the date of advertisement will also be considered provided the lease is valid for a minimum period of 15 years from the date of advertisement. The applicant should have ownership as defined under the term 'Own' above in the name of applicant/member of “Family Unit” (as defined in multiple dealership/distributorship norm of eligibility criteria)/parents (includes Step Father/Step Mother), grandparents (both maternal and paternal), Brother/Sister (including Step Brother & Step Sister), Son/Daughter (including Step Son/Step Daughter), Son-in-law/Daughter in law; of the applicant or the spouse (in case of married applicant) as on last date for submission of application as specified either in the advertisement or corrigendum (if any). In case of ownership/coownership by family member(s) as given above, consent in the form of a declaration from the family member(s) will be required.” 

8(n): Showroom: x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x 

The applicant should have ownership as defined under the term 'Own' above in the name of applicant/member of “Family Unit” (as defined in multiple dealership/distributorship norm of eligibility criteria)/parents (includes Step Father/Step Mother), grandparents (both maternal and paternal), Brother/Sister (including Step Brother & Step Sister), Son/Daughter (including Step Son/Step Daughter), Son-in-law/Daughter in law; of the applicant or the spouse (in case either in the advertisement or Corrigendum (if any). In case of ownership/co-ownership by family member(s) as given above, consent in the form of a declaration from the family member(s) will be required.

Applicants having registered lease deed commencing on any date prior to the date of advertisement will also be considered provided the lease is valid for a minimum period of 15 years from the date of advertisement.

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x” 

6. Now the question remains to be considered is whether the prescription contained in sub-clause quoted above to have a registered lease deed with a minimum period of 15 years from the date of advertisement is mandatory or directory ? According to the learned senior counsel for petitioner, the officials mistook that, all the conditions are mandatory or essential as on the date of submission of the application. It is also the contention that, the condition as regards the owning/leasing of lands for godown and/or showroom can only be treated as auxiliary conditions or conditions directory in nature as on the last date of the submission of the application, and the said condition can only be treated as mandatory after a candidate is selected for LPG distributorship. It is also submitted that, petitioner after receiving Ext.P3 communication has entered into a registered lease deed with the title owners of the showroom on 20.1.2018 for 5 years, where a showroom is proposed, evident from Ext.P7 and thereafter entered into an unregistered lease deed as per Ext.P8 for a period of 15 years from 24.1.2018. Therefore, in my considered opinion, it is categoric and clear that, it is an admitted fact that, petitioner has not complied with the requirement of a registered deed for a period of 15 years from the date of the advertisement. Learned senior counsel for petitioner heavily relied on judgment of a Division Bench of Calcuttta High Court under similar circumstances in Swapnil Singh v. Bharat Petroleum Corporation Limited and others [(2014) 2 High Court Cases (Cal)339]. It is true, similar question was considered by the Division Bench and has overruled the judgment of the single Judge not interfering with the cancellation made by the Oil Company, holding that, if there is any deficiency, company should have intimated the petitioner for rectification and further directed to issue letter of intent to the appellant therein. However, learned counsel appearing for respondents 2 to 5 has invited my attention to the judgement of the Apex Court in Civil Appeal Nos.6928-6929 of 2015 dated 8.9.2015, whereby the Division Bench judgment of the Calcutta High Court was set aside and it was held that, the brochure and the application form clearly require the applicant to have a registered lease deed in her name. What was shown to the court was a notarised document and admittedly such document even though have been in existence was formalized into lease agreement only on 20th December, 2012 and that was registered on 21st December, 2012 whereas a registered lease deed of 15 years from the date of application i.e., 13.9.2011 was the stipulation insisted upon. It was further held that, the notarised document, therefore, does not advance the case of the respondent any further and therefore, it is quite clear that, the respondent was not eligible on the date of the application i.e., 13.9.2011.

7. Therefore, it is quite clear that, when there is an imperative condition contained under the guidelines to have a registered lease deed for a period of 15 years commencing from the date of advertisement, the production of registered lease deed for a period of 5 years from the date of advertisement will not suffice the situation. The act and conduct of the petitioner clearly violates the guidelines provided for the purpose. However, learned senior counsel for petitioner submitted that, one cannot have a registered lease deed before he is selected. But, it is clear from section 47 of the Indian Registration Act that, the party can have an unregistered lease deed from an anterior date, which if registered on a subsequent date will become operative from the date of execution of the deed. Therefore, the contention advanced by the learned senior counsel for petitioner that, prior registration is not possible cannot be sustained under law. This court had occasion to consider a similar question in W.P.(C) No.16534 of 2014 and other connected cases and has rendered a judgment on 25.11.2016 in Alif M. V. Bharat Petroleum Corporation Ltd. and others [MANU/KE/2102/2016] holding that such condition is of an imperative nature, even though condition therein was a registered lease agreement on the last date of application. Learned senior counsel for petitioner again invited my attention to a judgment of the Apex Court in K. Vinod Kumar v. S.Palanisamy and others [(2003) 10 SCC 681] wherein it was held that, the Bharat Petroleum Corporation Limited should have provided time in order to produce the lease deed in accordance with the terms of the guidelines. But from the factual narration contained thereunder, it is clear that, clause (g) of the advertisement provided that, the applicant should furnish along with the location details, land for godown facilities, which he or she may make available for the distributorship considering the location of the lands from the point of view of commercial angle, applicants willing to transfer the land/facilities on ownership/long lease to Bharat Petroleum Corporation Limited, at the rates acceptable to Bharat Petroleum Corporation Ltd, would be given preference. If an applicant after selection is unable to provide the land indicated by him/her earlier, within a period of two months, the allotment of Bharat Gas distributorship made to him/her would be cancelled. Therefore, it is clear that, the factual circumstances and the requirement that was considered by the Apex Court was an entirely different one and the same has no bearing to the issue that is projected by the petitioner in this writ petition.

8. Learned counsel appearing for respondents 2 to 4 has contended that, if the case projected by the petitioner is accepted, other applicants who have satisfied the conditions in respect of showroom space will be put to lot of prejudice since they have complied with the conditions contained under Ext.P6 guidelines quoted above and will turn out to be an arbitrary and illegal action on the part of the respondents. I find force in the said contention. Moreover, petitioner has participated in the tender understanding the condition contained in the guidelines applicable for the purpose. Therefore, the petitioner was well aware that, the condition contained under the guidelines to have a registered lease deed for a period of 15 years is a necessary requisite in order to satisfy the requirements. Petitioner has made necessary details in the application with respect to the lease deed, but it was not in terms of the guidelines provided for the selection, evident from Ext.P6, when field verification was conducted. Moreover, in my considered opinion, it can never be termed as a directory condition since the showroom is a necessary concomitant for the conduct of LPG distributorship. Therefore, no rectification is possible after the selection is over. So also, since the requirement was made as a condition precedent, and if all other applicants have complied with the same, then the petitioner who has not complied with such a condition, can turn around and contend that, it is only a directory requirement, which can be rectified by the petitioner after the selection is over, which contention, if accepted, will be arbitrary and illegal. It is also explicit and clear that Ext.P5 order is passed in accordance with the stipulations in Ext.P1 advertisement and Ext.P6 guidelines.

9. Taking into account all the aforesaid aspects and reckoning the legal situations discussed above, I am of the considered opinion that, petitioner has not made out any case of arbitrariness, illegality and unfairness justifying interference of this court under Article 226 of the Constitution of India.

Therefore, writ petition fails, accordingly it is dismissed.